Papers Relating to the Foreign Relations of the United States, 1923, Volume II

819.51/357: Telegram

The Secretary of State to the Minister in Panama (South)

Washington, December 28, 1922—6 p.m.

58. Your December 15, 4 p.m.

If the proposed law should be passed you will make formal and energetic representations to the President³⁰ to dissuade him from signing it. You will point out that the Government of Panama assured the government of the United States on December 31, 1903,³¹ before the ratification of the Canal Treaty, that it intended to invest the bulk of the $10,000,000 paid by the United States in a permanent manner, so that the fund would always remain intact in order to give stability to the finances of the Government. You will also remind the government that this matter was again discussed at the time of the payment of the $10,000,000 to Panama and that the United States insisted that the fund should be safely invested to secure the stability of the Government’s finances and that Panama accepted the point of view of this Government.³² To transfer this fund to Panama, and to confide its investment to the National Bank does not appear to this Government a sound procedure, or a procedure consistent with Panama’s undertakings above referred to, especially as no adequate safeguards appear to be provided to govern the investment of these funds. In view, therefore, of the understanding between the two Governments in accordance with which the Canal Treaty was ratified and the money paid over, the Government of the United States hopes that the President of Panama will not sanction the law in question.

Hughes

30. Belisario Porras.
31. Foreign Relations, 1903, p. 281.
32. See ibid., 1904, pp. 651–655.